In Vol. V, Art. 31 (which we issued in December of 2005) we printed the following statements from knowledgeable shipping executives:

• “‘Capacity may outpace demand next year. The capacity increase will surge in the second half of 2007 when a big bulk of new ships are delivered to their owners. Shipping lines will need to cut costs, look again at their route networks and other measures to get ready.’ — Park Jung Won, Chief Executive, Hanjin Shipping …

• “‘There’s too much capacity coming into service … This situation was caused by the shipping lines’ greed. They will have to increase efficiency by reorganizing their fleet, mergers and acquisitions or other measures to cope with falling rates.’ — Jee Heon Seok, Hyundai Securities Analyst …

• “‘The shipping industry must prepare for a dampening effect as more newbuilds come on stream. Be prepared for possible changes.’ — S. S. Teo, Chairman, Federation of Asean Shipowners’ Associations (FASA)

… But it was like talking to the wall. The “corporate fanning of feathers” continued to prevail.

Then in Vol. VII, Art. 37 (which we issued in June of 2006) we printed the following:

• “‘The deluge hasn’t hit yet, but we will see more and more vacant space on these ships,’ said Mark Page, director of research for Drewry Shipping Consultants of London … ‘For some time now, we have been receiving far too much in the way of ships and in very large ships in particular. Now we are looking at three years to 3 ½ years of overcapacity’…

• “Several factors are weighing on the industry, according to the Times. Chief among them is the growing evidence of economic cooling in the U.S. and other countries, coupled with rising prices and interest rates. Signs of inflation, particularly red-hot energy costs, led Federal Reserve Chairman Ben S. Bernanke on Monday to pronounce the price trends ‘unwelcome’ and the U.S. economy ‘in a period of recession’.

Mr. Page hit the nail right on the head more than 2 ½ years ago, but very few heeded his warning. It’s been “Full speed ahead” since then, causing some 675,000 TEUs on 255 container ships to be forced out of service so far, with the likelihood that another 100,000 TEUs will be shelved early next month. Is this blunder a result of stubbornness or stupidity?

And with respect to the “recession” that officials are now claiming began “12 months ago”, well that’s just more baloney for those who “only know what they read in the newspapers”. They must have forgotten that Mr. Bernanke, back in June of 2006, had admitted that the U.S. was already “in a period of recession”. Those dissemblers have very poor memories.